Take a deposit before you start the job

Ask for it on the quote

You can put the request on the document itself. On a quote or an invoice, tick Ask for a deposit before the work starts and say how much, as a percentage of the total or an amount. It prints on the PDF as "Deposit requested" and shows on the customer's portal page before they accept.

Asking records nothing. Nothing reaches your books until the money arrives, and then you record it on its bank line as below. A percentage is worked out on the total including sales tax, because that is what the customer is being asked to pay, and the request never changes the total: the whole amount is still what the job costs.

When you convert an accepted quote into an invoice, the request does not carry across, because by then the deposit is usually already in hand and the invoice's job is to apply it rather than ask again. A duplicate of an invoice does not inherit it either, and a credit note cannot ask for a deposit: it gives money back, so there is nothing to ask for.

A plumber does not start a $9,000 bathroom without money up front. When that money arrives it is in your bank, but you have not earned it: until the work is done you owe it back. TALISK_HQ records it as a customer deposit, which keeps it out of your income and off your sales tax return until you invoice the work.

Record the deposit when it arrives

1. On Ledger › Banking › Transactions, find the deposit that arrived and open its details with the chevron at the start of the row.
2. Under Change what this is, click Customer deposit.
3. Pick the customer it came from and click OK.

The line is now recorded, and the customer carries that deposit. You can see what everyone is holding on Invoicing › Clients, in the Deposit held column. To reverse the whole thing, open the line's details again and click Undo customer deposit.

Record a deposit before the bank statement arrives

Money often lands days before the statement does. On Invoicing › Clients, open the customer and use Record a deposit. Enter what arrived and the day it arrived.

Where TALISK_HQ holds it until the bank line turns up depends on one setting on your book, Received payments deposit to:

• Bank account (Cash) — deposit straight to the bank, which is the default, books it to your general Cash and Bank account. That is not the account it really landed in, so until the bank line is matched, the bank you actually banked it into will read short by the deposit.
• Undeposited Funds — hold until the bank deposit lands books it to Undeposited Funds instead, which is a holding account for money in hand that has not reached the bank yet.

Either way, when the real bank line turns up on Ledger › Banking › Transactions, open its details and use Settle customer deposit. TALISK_HQ then moves the money onto that bank's own account and marks the line, so the same money is never recorded twice. What you owe the customer does not change, and neither does your income: the deposit stays in the account your books use for customer deposits until you invoice the work, refund it, or keep it because the customer walked away.

If you had already categorized that bank line, settling it removes the entry behind the category, because the deposit already recorded that money; the line keeps the category you picked, and undoing the settle puts the entry back.

Deposits still waiting for a bank line are listed on the customer's page as Awaiting the bank line, so nothing sits there forgotten.

TALISK_HQ settles a deposit on its own only when the bank line is unmistakable: it is the only waiting deposit of exactly that amount, the line is dated no more than 5 days before the day the money was received and no more than 30 days after it, and no customer receipt or store sale within 5 cents of that amount is still waiting in Undeposited Funds. Anything less certain waits for you to settle it by hand.

A deposit's own bank line is also kept away from your invoices, so the same money is never recorded twice. While a deposit from a customer is still waiting for its bank line, a payment from that customer of the same amount (within 5 cents) asks for a second click if it is dated any time from 5 days before the deposit was received onwards, however late: matching it to one of their invoices stops, names the deposit by the day it was received and its amount, and points you to Settle customer deposit. If it really is a different payment, choose Match it anyway. TALISK_HQ's own matching never pairs such a line with an invoice; it offers it as a suggestion instead, and the review queue says why. A same-amount payment from a different customer is held back the same way only while it is dated within that 5-days-before, 30-days-after span of the deposit, and only from automatic matching.

Three things end this for a deposit: settling it to its bank line with Settle customer deposit (on its own, or with the rest of a larger line placed, below); removing it from the customer's page, which you can do only while none of it has been put towards an invoice; or telling TALISK_HQ that Its money arrived elsewhere (below). Keeping a deposit because the customer walked away does not end it, because the money is still expected on a bank line. Until one of the three, Match it anyway is the way through.

Sometimes a deposit's money never reaches an account TALISK_HQ tracks: you kept it as cash, or it was paid into an account you have not connected to TALISK_HQ. Then no bank line of its own will ever turn up for Settle customer deposit to take. On the customer's page, choose Its money arrived elsewhere on that deposit, say where it went, and choose Stop waiting for it. Nothing is posted: the money is already on Cash and Bank, where recording the deposit put it, which is where money you hold outside your tracked accounts belongs. TALISK_HQ stops waiting for the bank line, the deposit is marked Arrived elsewhere with the reason you gave, and the customer's later payments of the same amount are matched to their invoices as usual. If you change your mind, choose Undo on the deposit and it waits for its bank line again. Once it no longer waits, you can refund it on a money-out bank line like any other deposit.

This is not for money that reached a bank account you track in TALISK_HQ, even as part of a larger deposit with other money in it. That bank line already counts the money, so closing the deposit would count the money twice; settle the deposit on that line with the rest placed instead (below). It is only for a deposit recorded to Cash and Bank: one held in Undeposited Funds still needs Settle customer deposit, or removing. It is not available on a deposit that a bank line has already settled part of. It is not for money that never arrived at all; remove the deposit instead. And it is not for money that arrived before your books' start date: see the next section.

Settle customer deposit needs the bank line to cover what is waiting exactly. A line that arrives short needs the fee entered (below) or, if the customer sent the deposit in two transfers, an amount entered so this line settles part of it. A line larger than what is still waiting is settled with the rest placed, below.

One bank line, a deposit and other money. Dana pays a $500.00 deposit on 2 March and you record it that day. On 6 March you bank it together with Acme's $1,000.00 cheque for invoice INV-1042: one bank line of $1,500.00. Open the line in Ledger › Banking › Transactions and choose Settle customer deposit, then Dana's deposit. Because the deposits chosen come to less than the line, the dialog shows The other $1,000.00 and asks where it goes:

• Pays an invoice. Choose INV-1042. The amount starts at as much as the invoice can take, which is what is still due on it plus any payment you already recorded on it by hand that no bank line has claimed yet; change it when only part of the rest pays the invoice.
• The rest is booked to. The line's own category. If the line already has one, you confirm it; if it has none, you choose it here, in the same step, and never with a separate category change first (that would book the whole line to the category the moment you stopped).

Before you confirm, the dialog shows how the line splits: the deposit, the invoice part (what was already recorded and what is new), and the category part. Every dollar of the line has to be placed, to the cent; nothing is posted until it is.

What it posts: the deposit moves onto the bank account exactly as a settle on its own does, and stays owed to Dana until you invoice the work. The invoice part is recorded as that invoice's payment. The category part is booked to the category. Nothing here charges or claims sales tax: a taxable cash sale in the rest belongs on an invoice, which carries its own tax, never on the category. If the rest is another customer's deposit, record it first and add it to the deposits this line settles.

It stops and says why when:

• the rest looks like a payment you already recorded by hand on an invoice, with no bank line yet: booking it to a category would count it twice, so it names that invoice and suggests leaving the deposit waiting. If it is different money, choose to settle it anyway;
• the rest, or the invoice's part of it, matches money waiting in Undeposited Funds, or a customer's deposit still waiting for its own bank line. Each part asks on its own, and each "settle it anyway" is recorded;
• the category would be your customer deposits or customer credits account, a bank or cash account, or a name TALISK_HQ cannot match to an account in your chart (it would land in Sales);
• the invoice is not open, or cannot take that much; a fee is entered as well (settle the fee on its own); or the line is a payout from your online store.

To take it back, choose Unsettle customer deposit on the line: it undoes the whole line in one step, the invoice's payment, the deposit and a category it set. If you changed that category after settling, the undo puts back what the line had before the settle and tells you which category it replaced. The invoice's own Unmatch refuses a line a deposit also settled and sends you to the line's undo, because undoing only the payment would book the whole line to its category. If that invoice has since been cancelled or written off, the line can't be undone; reinstate a written-off invoice first.

If the bank line matches, to the cent, a customer receipt or a store sale that is still waiting in Undeposited Funds, Settle customer deposit stops and says so. That line most likely brings in that money, so settle it against the receipt or the sale instead. If that receipt will never reach the bank on its own line, choose Settle it to this deposit anyway.

A bank line from before your books' start date can't settle a deposit recorded after it. That money is already counted in your opening balances, so TALISK_HQ refuses the settle and never pairs the two on its own; the deposit waits for the bank line that really brought it in.

A deposit paid before your books' start date. When you moved to TALISK_HQ, your accountant's opening balances already counted the money in your bank, and, if they list customer deposits, what you owed for them. So a deposit a customer paid before your start date is never recorded the ordinary way: Record a deposit with that date says the money arrived before your books start, and recording it with a later date instead would count the money a second time. TALISK_HQ also warns you when a deposit you are recording matches a bank line from just before your start date; if it really is a different payment, choose Record it anyway: it is a different payment.

If your opening balances include what you owe the customer, choose Record an opening deposit on the customer's page (or Record it as an opening deposit where TALISK_HQ offers it), with the day the money arrived. Nothing is posted: the deposit just says which customer that part of your opening balances belongs to, so you can apply it when you invoice the job, refund it, or keep it if the customer walks away, exactly like any other deposit. TALISK_HQ refuses it when your opening balances do not hold that much in customer deposits that no customer accounts for yet. Then ask your accountant to add what you owed to your opening balances on your customer deposits account (Ledger › Setup › Opening balances) first. Don't post it there yourself with a journal entry, and don't record a payment for it when you invoice the job: both count the money again.

If you already recorded such a deposit with a later date, choose It arrived before my books started on it, with the day the money really arrived. TALISK_HQ takes its entry off the books (your opening balances already count the money) and keeps everything it was applied to as it is. This needs full access to the books, and it is refused in a closed period. Don't record an opening deposit for that money as well: TALISK_HQ stops you, names the deposit you already recorded, and points you to It arrived before my books started on it. The same check runs the other way, when you record a deposit for money already recorded as an opening deposit. If it really is a second payment of the same amount, choose Record this as a separate, second deposit.

An opening deposit can't be removed or undone while your opening balances include it, because that would leave part of them belonging to nobody. If you put it on the wrong customer, choose Change customer on it and search for the customer who paid. If your opening balances are later changed so they no longer include the deposit, TALISK_HQ offers No longer in my opening balances, remove it on it: that takes it off the customer's balance and posts nothing.

When your opening balances hold customer deposits that no customer accounts for, Books health shows a card with the amount until you record them. It also shows a card the other way round, when your customers' opening deposits come to more than your opening balances hold, for example after the opening balances were changed; that card points you to the remove control on the deposit.

If a deposit you recorded never actually turned up, remove it from the customer's page rather than refunding it, because no money left your bank. Do that before you use it: once a deposit has been put towards an invoice, TALISK_HQ has no way to take it back off that invoice yet, so it can no longer be removed either.

If the money arrives short because the receiving side took a fee, settle the line for the fee as well: enter what the customer sent and the fee that came off it, and TALISK_HQ books the fee to Payment Processing Fees. Do not reduce the deposit itself to match the bank line, because the customer is still owed what they sent you.

If you already recorded a deposit early and then try to record the same bank line as a new deposit, TALISK_HQ stops you and names the one you already have. If it really is a second deposit from that customer, choose Record this as a separate, second deposit.

TALISK_HQ keeps your customer deposits in one liability account of their own, and it will not turn an account that already holds entries into that account. If your book's account numbered 2260 already has entries in it and was never set up as the deposits account, recording a deposit stops and names it. Nothing is changed. The deposits need a fresh liability account, because the deposit records start empty and an account with a balance would never agree with them.

A deposit in another currency

If a customer pays you in US dollars, or in euros, record it on the bank line it arrived on, in the account you hold that money in. That line needs its own exchange rate first: until the rate has landed TALISK_HQ will say so rather than guess, because the figure it works out on the day is the one your books carry from then on. TALISK_HQ keeps two figures: what the customer sent, and what that was worth in your own currency on the day it landed. The second figure is the one your books carry, and it stays put. If the exchange rate moves afterwards, what you owe the customer back does not change in your accounts.

You see both on the customer's page: the amount in its own currency, with your own currency in brackets beside it.

The difference is worked out when the deposit is spent, not while it is held. So when you apply it to an invoice, or give it back, TALISK_HQ works out the exchange gain or loss on that day and records it. Between those two moments there is nothing to do.

Two things to know:

• A deposit in another currency is applied or given back in full, not in parts. If you need to spend part of one, record the deposits as separate amounts as they arrive.
• You can apply it to an invoice priced in that same currency, or to one priced in your own currency. You cannot apply it to an invoice priced in a third currency.
• It cannot be kept as income when a customer walks away, the way a deposit in your own currency can. See below for why.

If you want to see what the still-held deposits are worth at today's rate, your accountant's year-end pack lists them under open foreign balances. That is a statement for them to read, not an entry in your books.

Use it when you invoice the work

1. Open the invoice on Invoicing › Invoices.
2. Click Apply deposit, which shows what that customer has on deposit.
3. Enter how much to use and click Apply deposit.

TALISK_HQ offers you the smaller of the deposit held and the balance due, so you cannot apply more than either. A part of a deposit can go on one invoice and the rest on the next, which is what happens on a job billed in stages.

On an invoice priced in another currency, Apply deposit offers only the deposits the customer paid in that same currency, applied in full. A deposit taken in your book's own currency cannot pay down such an invoice: it is held in your currency and the invoice is owed in the other one, so no single figure settles both. Give that deposit back and invoice the work in full. When the customer then pays into a Canadian-dollar account, record it from the invoice with Paid into a CAD account.

Give it back if the job does not happen

Find the withdrawal where you sent the money back, open its details, and click Deposit refund under Change what this is, then pick the same customer. The picker only lists customers who are actually holding a deposit, and TALISK_HQ refuses a refund larger than what they have. Their deposit goes back to zero and the two bank lines cancel out.

Why no sales tax is charged up front

A deposit is not payment for a sale until you apply it to one. The Excise Tax Act says so directly, and the CRA treats it the same way, so the GST or HST is charged on the invoice rather than on the money arriving. That is also how QuickBooks Online handles a retainer, so your accountant will recognise it.

The tax then lands once, on the invoice, at the moment you bill the work. Applying the deposit moves no tax at all: it simply pays that invoice down.

One thing worth checking with your accountant: if the money is really a prepayment for a specific job that is already agreed and settled, rather than a deposit against work that might still change, the CRA can treat it as payment straight away. TALISK_HQ cannot tell those apart from what it can see, so if a large sum arrives for a job that is already fully specified, ask.

Where a held deposit shows up

Four places, and none of them treats it as a payment:

• Invoicing › Clients, in the Deposit held column, and on the customer's own page under Deposits paid in advance with each deposit listed.
• The AR Aging report, on its own line under the total, labelled Deposits held (not owed to you). It is not taken off what the customer owes, because a deposit is money held against work you have not billed yet. That line is on the screen only: it is not in the aging PDF, the aging CSV, or the emailed reporting pack, because those documents are frozen as at the day they were produced and a deposit balance is a live figure.
• The customer's own portal, on the page listing their documents and on each invoice. They can see it and nothing more: applying, refunding and keeping a deposit are all your decisions. The balance they are asked to pay on an invoice is unchanged by it, and the page says so.
• The year-end pack for your accountant, as customer_deposits.csv: one row per deposit still held, with the customer, the date it arrived and the amount still behind it. Where part of a deposit has already gone on an invoice or been refunded, the row shows what is left and says so. That file lists today's holdings rather than the year end, because TALISK_HQ keeps no history of who was holding what; it says which date it is as at, and quotes the year-end balance of the account beside it.

Why this is not a customer credit

They sound alike and they are different events. A customer deposit is money you hold before a sale happens. A customer credit is money you owe back after one went wrong, such as a duplicate payment or a cancelled invoice they had already paid. They sit in different accounts, they carry different tax treatment, and your accountant reads them as separate lines, so TALISK_HQ keeps them apart. If a customer paid twice, use Customer credit instead.

If a customer walks away and you keep the deposit

The terms of some jobs let you keep a deposit when the customer cancels. It stops being money you owe them and becomes income, so this is the one deposit event that does charge sales tax.

1. Open the customer on Invoicing › Clients.
2. Under Deposits paid in advance, find the deposit and click Customer walked, keep it.
3. Choose the income account it should be recorded in, then click Continue.
4. Read what TALISK_HQ is about to do and click Forfeit deposit.

The account is your choice and TALISK_HQ will not pick one for you. There is no document behind a forfeited deposit saying what was sold, so there is nothing to work it out from. Most trades use their ordinary sales account; some keep a separate one so cancelled jobs are easy to find at year end. Ask your accountant if you are not sure.

A deposit taken in another currency cannot be kept as income yet. TALISK_HQ will say so on the deposit rather than offering the button. The sales tax inside a kept deposit is worked out of the amount and goes on a return, and which amount that is, what the customer sent or what it was worth in your own currency on the day, is a question your accountant should answer rather than TALISK_HQ guessing at. Refund the deposit, or apply it to an invoice.

One kind of account is not offered, and TALISK_HQ refuses it if you send it anyway: an account you have marked on your chart of accounts as income that is not a sale. Interest on a savings account is the usual one, along with an exchange gain or a cash rounding. Those are left out of the sales figure on your GST return on purpose, because they are not money you earned by supplying anything. A deposit you keep does charge sales tax, so recording it in one of those accounts would put tax on your return with no sales behind it, and the return would not add up. Pick a sales account instead.

TALISK_HQ offers this only on a deposit that is still held in full. If part of it has already gone on an invoice, or been refunded, reverse that first.

The tax comes out of what they paid

If a customer paid you $1,000 and you keep it, that $1,000 is the whole of it. The tax is not added on top, because there is nobody left to collect it from.

A deposit you keep is treated as already including GST or HST, and in Quebec QST as well, and each one is worked out on its own rather than at a single combined rate. GST or HST comes out at its own rate: $5 in every $105 where GST is 5%, and $13 in every $113 in Ontario. QST comes out of the same full amount separately, at $9.975 in every $109.975. So $1,000 kept in British Columbia is $47.62 of GST and $952.38 of income; in Ontario it is $115.04 of HST and $884.96 of income; and in Quebec it is $47.62 of GST, $90.70 of QST and $861.68 of income.

TALISK_HQ charges no PST on a deposit you keep, even if your books are registered to collect it. No sale took place, so there is nothing for PST to apply to: British Columbia says so directly, and says that PST collected on a forfeited deposit was collected in error. If you are registered in another province and your accountant reads its rules differently, tell us.

Whatever tax is charged goes on your next sales tax return along with everything else you collected that period.

If the customer is marked tax exempt, or your books are not registered for sales tax, no tax is charged and the whole amount is income.

This one cannot be undone

Applying a deposit or refunding it can be reversed. Forfeiting cannot, because it recognises income and puts tax on a return you may have already filed. TALISK_HQ asks you to confirm it for that reason, and it names the customer, the amount, the account and the tax before you do. If you keep a deposit by mistake, your accountant corrects it with a journal entry.

Only the owner, or a bookkeeper with full access, can keep a deposit. Recording one, applying one and refunding one are all everyday jobs that anyone with edit access can do.